Five points: is talk of a recession justified? Follow the data

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(Refiles to change number on last theme to 5 of 4. No other changes to text) A deluge of data from major economies comes at a pivotal moment in the debate over whether central banks are raising interest rates. interest in potentially strong global growth slow down.

And with nervous investors dumping risky assets en masse, what comes next after a cryptocurrency rout is also in focus.

Here’s to your week ahead in the markets of Ira Iosebashvili in New York, Tom Westbrook in Singapore, Elizabeth Howcroft, Sujata Rao and Karin Strohecker in London.

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1/ HARD OR SOFT LANDING?

The Federal Reserve is almost certain to raise interest rates by 50 basis points in future meetings. The upcoming data should show whether a significant tightening will result in a hard or soft landing for the economy.

Forecasts for Tuesday’s U.S. retail sales data call for a 0.7% rise in April after a monthly increase of 0.5% in March. Signs of the extent of inflation, which is showing only the slightest signs of moderating, is pinching consumers may also be evident in Tuesday’s earnings reports from Walmart, Home Depot and Macy’s.

Friday’s existing home sales data could show how quickly rising mortgage rates are cooling the housing market.

The Fed’s determination to contain inflation fueled fears of a hard landing. The S&P 500 is on course for its worst year since 2008 – any sign that the economy is holding up to higher rates would be a welcome relief.

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2/CRYPTO CRASH

Cryptocurrency aficionados and watchers will be watching the fallout from a dramatic price crash.

On Friday, Bitcoin was on course for a double-digit weekly decline and heading for a record losing streak. Other cryptocurrencies also slid as investors shunned risky assets as central banks got aggressive on inflation.

The question of whether so-called stablecoins can maintain their peg to the dollar as investor confidence plummets is key. Algorithmic stablecoin TerraUSD broke its peg and plunged as low as 30 cents as its complex balancing mechanism involving another floating token stopped working.

Others such as Tether, USD Coin, and Binance USD are confident that they will be spared the fate of TerraUSD as their cryptocurrencies are backed by reserves of dollar assets. These reserves may come under increasing scrutiny as investors assess whether these coins can handle a wave of redemptions.

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3/ TAKE THE PULSE OF ASIA

A data boost across Asia could recalibrate the outlook for regional assets.

Japan publishes data on growth, trade and inflation. If they beat expectations, even the most dovish central bank in the world could start to consider a more neutral stance – good news for a fragile yen.

China reports industrial production, retail sales and property prices, all likely sluggish. China is also setting benchmark rates, though traders see stability as the most likely outcome.

And in Australia, the wage and employment figures are out. Its central bank did not wait for data before raising rates on May 3 and markets suspect further hikes are ahead. Rates should be around 3% by the end of the year, any signs to the contrary could cause expectations to unwind.

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4/ WHAT POWER TO SPEND?

The consumer is in trouble. Soaring food and fuel prices are eroding disposable incomes, and lockdown-era savings that could have been spent on travel and shopping are rapidly dwindling.

Economists predict that COVID restrictions will have led to a 6% drop in April retail sales in China, almost double the falls in March. U.S. retail sales in April are expected to rise, but similar to March, gasoline and food could drive most of the increase.

British consumer confidence slumped in March to its lowest level in nearly half a century, research firm GfK said. A cost-of-living squeeze likely added to the sluggishness of shoppers in April.

Unsurprisingly, global consumer discretionary stocks have fallen nearly a third this year, outpacing a broader decline in the stock market index. Investors took note; many say they no longer rely on the consumer.

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5/ PIPELINES & PAYMENTS

The pressures on European gas markets show no signs of easing.

Moscow’s sanctions against Gazprom Germania, whose ownership was ceded to its gas producer Gazprom, and EuRoPol GAZ SA, owner of the Polish part of the Yamal-Europe gas pipeline, have driven up prices. A May 3 Kremlin decree prohibits Russian entities from entering into agreements with people on the sanctions list.

This affected flows to Europe already diminished after Ukraine declared a case of force majeure and said it would not reopen a key gas transit route from Russia to Europe until kyiv does not. wouldn’t get full control of its gas pipeline network.

And confusion still reigns among EU gas companies over a payment system decreed by Moscow in March that the European Commission says would breach EU sanctions as deadlines approach.

(Compiled by Dhara Ranasinghe; Editing by Emelia Sithole-Matarise)

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